By Mehreen Khan 21 June 2015
German Chancellor is called upon to reach an "honourable compromise" as Syriza accuse Troika of being "pathological liars"
Graffiti showing German Chancellor Angela Merkel is daubed on an Athens wall Photo: 2015 Getty Images
Greece's embattled government has made a last-ditch attempt to convince creditors to avert an unprecedented debt default in less than nine days.
On the eve of an emergency summit of European leaders in Brussels, finance minister Yanis Varoufakis appealed to German chancellor Angela Merkel to strike an "honourable compromise" to keep the country in the euro.
Ms Merkel faced a choice "to follow the sirens within her own government that embolden her to throw overboard the only Greek government that has remained true to its principles", Mr Varoufakis wrote in the Frankfurter Allgemeine Sonntagszeitung.
Greek prime minister Alexis Tsipras presented his plans for a deal to Ms Merkel, French president Francois Hollande and European Commission chief Jean-Claude Juncker during a call on Sunday, said Athens.
The call followed an emergency meeting of the Greek cabinet in Athens earlier in the day. The Leftist Syriza government is thought to be considering plans to raise its pensions age and to generate funds by taxing corporate profits over €500,000.
However, Paris and Berlin have warned Mr Tsipras that they will not discuss any detailed plans in Brussels, until the government first jumps the hurdle of securing an acceptable list of proposals with the Troika of the IMF, European Commission and ECB.
Ms Merkel is seen as one of the isolated government's last remaining allies in Europe.
But responding to reports Greece could be given a verbal promise to debt relief, Mr Varoufakis's spokesman took to Twitter to accuse creditors of being "pathological liars".
Important development https://twitter.com/traynorbrussels/status/612638284783685634 …
In another sign that the two sides continued to talk past each other, Mr Varoufakis said Greece would only consider making further concessions if the chancellor sent a positive "signal" to the country at Monday's summit.
"Our side will arrive in Brussels with the determination to compromise further as long as we are not asked to do what previous governments did."
Talks between Mr Varoufakis and his colleagues collapsed in acrimony on Thursday, as Eurozone finance chiefs shunned Athens' blueprint for a deal.
Two leaders met at the sidelines of a Brussels meeting earlier this month Sticking points around the level of pension cuts and VAT hikes remained, while Greece's plans for a "debt swap" have also been met with short shrift from its paymasters.
The cash-starved country has promised to make its latest public sector salaries and pensions payments, avoiding a domestic default in June, said deputy finance minister Dimitris Mardas.
However, the decision to pay the IMF will be a "political" not a financial one, Mr Mardas told Greek media. Greece owes the IMF €1.6bn on June 30 - the same day the country's bail-out programme officially expires.
The worsening in relations has seen bank deposits shrink at record rates. More than €1.6bn left the banking system on Friday, forcing the ECB to pump more liquidity to prevent a banking collapse over the weekend.
A further €1bn could flee the financial system on Monday, according to pre-orders for deposit withdrawals, banking sources told Reuters.The ECB is due to review Greek banks solvency on Monday morning before meetings of EU leaders and finance ministers in Brussels.
US treasury secretary Jacob Lew continued to caution against an unwitting miscalculation which could lead to the country being ejected from the single currency.
"Within Greece, the consequence of a failure here would mean a terrible, terrible decline in their economic performance,” Mr Lew told CNN.
“They will bear the first brunt of a failure."